$3.9m lawsuit against Fraser Coast council settled

A FORMER Queensland council CEO has settled a $3.9 million lawsuit against her previous employer and 11 councillors.

In November 2017, former CEO Lisa Desmond launched legal action against Fraser Coast Regional Council and its councillors in the Brisbane Supreme Court.

In documents lodged with the court Ms Desmond alleged the councillors falsely painted her as a "bully" who lodged "baseless complaints" against those who opposed her; that she misled councillors; and that she built a "culture of favouritism" in a toxic work environment rife in "fear of reprisal and low morale".

She claimed her "good character and reputation" were damaged because the councillors opened her to "ridicule and contempt".

The suit arose from comments made about her in the media, and council documents.

Court records show the suit was dropped by Ms Desmond on December 21.

When contacted, Ms Desmond was tight-lipped on the matter but confirmed the case had been settled outside of court.

"The matter has been resolved to the satisfaction of all parties outside of the court," Ms Desmond said, indicating the terms of the agreement were strictly confidential.

The suit was being fought by the council and councillors, with records showing documents were submitted on behalf of the defence up until June 29, 2018.

On July 20, Ms Desmond submitted a response to those defence arguments. That was followed by a discontinuance of the defamation suit five months later.

Ms Desmond was pushed out as the Fraser Coast Council CEO in February 2017 when councillors voted to discontinue her contract.

She was awarded an undisclosed amount as part of a termination payout.

A Fraser Coast Regional Council spokesperson said the "proceeding has resolved on terms acceptable to all parties".